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Rogue traders put spotlight on MediaCom

News, 02 December 2014

SYDNEY: Leading Australian advertisers are said to be reviewing their accounts with media agency MediaCom following revelations about irregularities in the reporting of target audience rating points.

After an internal Foxtel audit "identified some irregularities", MediaCom launched an investigation into suggestions that the pay TV broadcaster and Yum Restaurants, whose brands include KFC and Pizza Hut, could have been overcharged for television advertising bought on their behalf.

Insurance company IAG and automaker Volkswagen Australia were among other companies thought to be involved.


Ad News reported that GroupM, MediaCom's parent company, had carried out a covert audit of all its media agencies and trading units in the country over the past three weeks and "appears to have cleared all but the particular Mediacom trading team on Foxtel and Yum".

The Australian reported John Steedman, chairman and chief executive of GroupM, as saying that three Mediacom staff in Sydney had been involved, of whom one had been dismissed, one suspended and one had resigned. Other staff had also left – 13 in all according to Mumbrella – but Steedman said the other departures were "not necessarily" related to this particular issue.

"We have been open and transparent on the matter," he declared. "No-one has financially gained, either individuals or the business."

Observers were baffled as to why the individuals had behaved the way they did. "TV TARP trading is massively audited," said one broadcast executive. "It's always going to get picked up."

Another commentator noted the aggressive way Foxtel and Yum operated as TV trading clients. "They're unforgiving," he said. "I can see how the pressure might have popped these managers.

"It's by no means any justification for what looks like has happened but I can see how they might have got into it. I am surprised it didn't get picked up earlier."

Data sourced from AdNews, The Australian, Mumbrella; additional content by Warc staff